Chasing debts civilly

The bane of illegal moneylending was once characterised as much by usurious interest rates that enslaved borrowers as it was by gangster-style tactics of loan sharks' henchmen. Thanks to rigorous law enforcement, the dreaded Ah Longs are less visible now. What Singaporeans are seeing instead is a new breed of runners who brazenly harass debtors in public places, wearing polos emblazoned with "debt recovery unit" tags and displaying banners to boot that read "Attention. Debt collection in progress". It is an altogether disturbing development.

Debt recovery is, of course, a legitimate job, but it need not be so abrasive that borrowers are hampered from earning a living and humiliated in unacceptable ways at their workplace or in their neighbourhood. In a recent incident, seven people toppled the equipment of a hawker at Funan Mall, alarming customers and disrupting activity.

Moneylenders might see polite recovery of debts as oxymoronic in the same way as a war can never be civil. But society would be right to expect them to adopt fair collection practices and to abstain from strong-arm tactics. Indeed, the latter would be self-defeating if these diminish the capacity of borrowers to earn enough to repay their loans, or even cause them to flee.

Harassing behaviour, threats and physical violence are already covered by existing laws. But there are a host of other ways that degrees of harm can be inflicted on hapless borrowers, for example, shaming them via letters of demand faxed to their workplaces, which a Member of Parliament had decried. One cannot fully tie the hands of debt chasers, who are expected to be persistent. Just how far they can go is a subject that is being studied by an advisory committee on moneylending, initiated by the Law Ministry. To demonstrate professionalism, debt collectors should propose their own code of conduct as well.